In the current economic climate, your website’s conversion rate is more important than ever. Here are five reasons why conversion rate optimization should be your top priority.
Reason 1: The obvious one—you get more customers, free
The obvious reason to improve your conversion rate is that you want more customers without having to spend a penny more on advertising. But there are other, even better, reasons…
Reason 2: The “slight edge” phenomenon
In many competitions, “the winner takes all” (or at least “the winner takes most”). This is particularly true of internet marketing.
This has an important implication: If you want to be twice as profitable as your competitors, you don’t have to be twice as good as them. You just have to be slightly better. This phenomenon is sometimes called the “slight edge.”
The horse on the right has the slight edge:
In particular, you need to have a higher profit-per-visitor than your competitors do. Small increases to your profit-per-visitor can have an enormous effect on your business’s profitability and success.
A word of warning: This is no time for complacency. Once you have the slight edge over your competitors, you need to make sure you stay ahead.
Reason 3: Conversion rate optimization makes financial sense—because your profit is surprisingly sensitive to your conversion rate
The following diagram shows how a modest increase in conversion rate—say 50%—can have an enormous effect on a company’s profit:
That’s because the profit from the additional conversions goes straight to your bottom line. In fact, a 10% change in conversion rate can mean the difference between making a profit and suffering a loss.
Reason 4: Conversion rate optimization makes your business more robust
The ultimate goal of conversion rate optimization is to allow you to spend more per ad-impression than your competitors can. This enables you to advertise in other media (online and offline), which in turn makes your company much more robust. What results is a “virtuous circle” of benefits for your company (and a vicious circle for your competitors).
1. When you increase your conversion rate, your revenue increases.
2. That additional revenue-per-visitor enables you to do more. For example, you can reinvest those earnings into other marketing efforts, like these:
- Achieving better SEO for more valuable keyword rankings.
- Expanding your SEM campaign to drive more traffic.
- Using other marketing channels like print and radio.
These new marketing efforts increase the number of visitors and generate even more revenue you wouldn’t otherwise have been able to earn. Each increase in conversion opens up new opportunities for customer acquisition, thus creating a highly profitable loop of increased revenue. In extremely competitive markets, conversion rate optimization is increasingly becoming a prerequisite for survival.
Reason 5: The first-mover advantage
Here’s a final reason why you should be taking action now to improve your conversion rate: If your competitors aren’t doing it already, they will be soon. And there’s an enormous advantage to being in the lead rather than lagging behind. Once you’re ahead, you gain money; if you’re always playing catch-up, on the other hand, you lose money.
Most marketing is based on mere opinions. CRO, on the other hand, is based on facts. You see, we test every change. If the test doesn’t produce a winner, we learn from that test and discard the variation. You haven’t lost a thing. However, when a test wins, we quickly implement the improved version. This process repeats over and over, meaning that only better performing versions of pages are kept, so your conversion rate (and revenue) can only go up.
Does your business depend on free traffic or SEO?
If so, here’s a special note for you:
If your web business depends on free traffic from Google or other search engines, here are the benefits you’ll get from improving your conversion rate:
- The obvious benefit: You can generate more money out of thin air from your existing rankings.
- Your customers will like you more, so there’s a better chance they’ll stay with you for longer.
- Your increased conversion rate will mean you can profitably advertise in different media—such as PPC, affiliate marketing, or offline—which means your business will be much more stable. You’ll no longer be hooked on free traffic and no longer at the whim of a Google algorithm change.
- If you do it right, increasing your conversion rate will make your website more appealing to visitors, so other sites are more likely to link to it.
What you should do now
If you are serious about becoming great at conversion, you should download our amazingly useful free reports.
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